NOTES TO THE FINANCIAL STATEMENTS
July 31, 2013
1. ORGANIZATION AND BUSINESS OPERATIONS
Aura Bio Corp., now known as Global Resource Energy Inc., a corporation organized on November 6, 2008 under the laws of the State of Nevada (the “Company”) filed an amendment to its Articles of Incorporation (the “Amendment”) to change its name from Aura Bio Corp. to Global Resource Energy Inc. on November 16, 2010. The change in name to Global Resource Energy Inc. was effected December 10, 2010 on the Over-the-Counter Bulletin Board marketplace upon clearance by FINRA. The new trading symbol for the shares of common stock of the Company trading on the Over-the-Counter Bulletin Board has been changed to “GBEN”.
The amendment and change in corporate name to Global Resource Energy Inc. (the “Amendment”) was approved by the Board of Directors by a unanimous written consent resolution dated November 9, 2010. The Amendment was subsequently approved by certain shareholders of the Company holding a majority of the total issued and outstanding shares of common stock of the Company by written consent resolutions dated November 9, 2010. The change in corporate name was undertaken to better reflect the Company’s future business operations.
The Amendment filed with the Nevada Secretary of State also increased the Company’s authorized capital from 75,000,000 shares of common stock, par value, $0.001, to 250,000,000 shares of common stock, par value $0.001.
On November 9, 2010, the Board of Directors of the Company also authorized and approved a forward stock split of the Company’s total issued and outstanding shares of common stock on the basis of three for one (3:1) (the “Forward Stock Split”). The Forward Stock Split was effectuated based on market conditions and upon a determination by the Board of Directors that the Forward Stock Split was in the Corporation’s best interests and those of its shareholders.
The Forward Stock Split was effectuated on December 10, 2010 based upon the filing with and acceptance by FINRA of the appropriate documentation. The Forward Stock Split increased the Corporation’s total issued and outstanding shares from 27,000,000 to 81,000,000 shares of common stock. The common stock will continue to be $0.001 par value.
On April 25, 2011, the Company received a resignation notice from Harry Lappa as President and Chief Executive Officer of the Company. On the same day, the Company appointed Douglas Roe as its new President and Chief Executive Officer. Concurrent with the appointment of Mr. Roe, he received a $90,000 signing bonus for acting as President and Chief Executive Officer. The signing bonus was paid to Mr. Roe by the issuance of 90 million shares (pre-reverse-split) of the Company. This issuance resulted in a change of control of the Company, Mr. Roe having voting control over 52.6% of the Company’s issued and outstanding shares of common stock.
On April 26, 2011, the Company filed a Certificate of Amendment with the Secretary of State of Nevada, with the effective date of May 2, 2011, effecting a for 1,000 reverse-split of the Company’s issued and outstanding common shares. The reverse Split was approved by FINRA on July 27, 2011, and has been retroactively impacted to all shares and per share figures in these financial statements.
On November 12, 2012, the Company entered into a Certified Emission Reductions (“CER”) Pre-sale and Purchase Agreement (“CERSPA”) with Bluforest, Inc. (“Bluforest”). Under the agreement, we pre-purchased 66,000 CERs from Bluforest. The total purchase price of $660,000 was paid in the form of 3,000,000 restricted shares of the Company’s common stock.
On March 1, 2013 the Board of Directors accepted the resignation of Robert Alan Baker as the President/Chief Executive Officer, Secretary, Treasurer and the sole member of the Board of Directors of the Company. Simultaneously, Mr. Roland Hutzler was appointed the sole member of the Board of Directors and as the President/Chief Executive Officer, Secretary and Treasurer of the Company.
GLOBAL RESOURCE ENERGY INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
July 31, 2013
1. ORGANIZATION AND BUSINESS OPERATIONS (continued)
The Company is in the development stage as defined under Statement on Financial Accounting Standards Accounting Standards Codification FASB ASC 915-205 "Development-Stage Entities.” The Company has not generated any revenue to date and consequently its operations are subject to all risks inherent in the establishment of a new business enterprise. For the period from inception, November 6, 2008 through the six month period ended July 31, 2013 the Company has accumulated losses of $692,423.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a)
Basis of Presentation
The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars.
b)
Going Concern
The financial statements have been prepared on a going concern basis, which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred losses since inception resulting in an accumulated deficit of $692,423 as of July 31, 2013 and further losses are anticipated in the development of its business raising substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management will be required to raise additional capital to fund its current and future operations, and there is no guarantee said capital will be available as required.
c)
Cash and Cash Equivalents
The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents.
d)
Use of Estimates and Assumptions
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
e)
Foreign Currency Translation
The Company's functional currency and its reporting currency is the United States dollar.
f)
Financial Instruments
The carrying value of the Company’s financial instruments approximates their fair value because of the short maturity of these instruments
.
g)
Identified intangible assets
Identified intangible assets with identifiable useful lives are generally amortized on a straight-line basis over the periods of benefit in accordance with ASC 350 (formerly SFAS No.142). We amortize all acquisition-related intangible assets that are subject to amortization over the estimated useful life based on economic benefit.
GLOBAL RESOURCE ENERGY INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
July 31, 2013
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (continued)
h)
Stock-based Compensation
Stock-based compensation is accounted for using the Equity-Based Payments to Non-Employees Topic of the FASB ASC 718, which establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments. The Company determines the value of stock issued at the date of grant. It also determines at the date of grant, the value of stock at fair market value or the value of services rendered (based on contract or otherwise) whichever is more readily determinable. To date, the Company has not adopted a stock option plan and has not granted any stock options.
i)
Income Taxes
Income taxes are accounted for under the assets and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled.
j)
Basic and Diluted Net Loss per Share
The Company computes loss per share in accordance with ASC 260, “Earnings per Share” which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive.
k)
Fiscal Periods
The Company's fiscal year end is January 31.
3. IDENTIFIED INTANGIBLE ASSETS
On January 26, 2012, the Company entered into an assignment agreement whereby Patedma Group Corp. (“Patedma”) assigned its distributor agreement with Dongguan City Cled Optoelectonic Co. Ltd. for the distribution of LED Street Lights, Solar LED Street Lights, LED Tunnel Lights, LED Flood Lights, LED High Bay Lights, LED High Mask Lights, LED Garden Lights, Light Sourcing and all Indoor Lighting sold and exported by Supplier with their trademark CLED. Under the terms of the assignment, the Company issued 1,000,000 shares to Patedma. The value of the assets is $187,500 based on the fair market value of the shares on the issuance date. The agreement shall be terminated on October 31, 2012 with the option to renew for a further period of 12 months subject to the consent.
As a result of the aforementioned agreement, we capitalized $187,500 as identified intangible assets with a life of nine months, the term of the existing distributorship agreement, which amount is subject to amortization on a monthly basis over the term.
During the fiscal year ended January 31, 2013, the Company fully amortized the capitalized value of the intangible assets totaling $187,500.
|
|
|
July 31, 2013
|
|
|
January 31, 2013
|
|
|
Cost
|
|
$
|
-
|
|
|
|
187,500
|
|
|
Less accumulated amortization
|
|
|
-
|
|
|
|
(187,500
|
|
|
|
|
$
|
-
|
|
|
$
|
-
|
|
GLOBAL RESOURCE ENERGY INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
July 31, 2013
3. IDENTIFIED INTANGIBLE ASSETS – (continued)
On November 1, 2012, the parties to the Distribution Agreement agreed to exercise the option and extend the term of the agreement for a further year, with a new termination date of October 31, 2013.
On November 8, 2012, the Company negotiated an extension on its licensing agreement with Patedma to extend the exclusive distribution agreement of LED street lighting for a further year to expire November, 2013 or as at October 31, 2013 when the Distribution Agreement expires. This extension will allow the Company to sell under Patedma’s license agreement should funding be available to enter the LED street light industry.
On August 14, 2012, the Company announced further expansion into clean energy by signing a Letter of Intent to sell 49% of its exclusive North American Distribution of CLED Street Lights Rights to Balon Bleu Holdings LLC. This Letter of Intent for a 49% purchase of the Company's Exclusive North American Rights of the CLED Street Lights will provide capital and additional resources for the Company's entry into the North American Market with CLED Street lights.
Under the terms of the agreement Balon Bleu Holdings, a Nevada LLC, will pay an immediate deposit of $50,000 to the Company and $50,000 every month over the next five months for a total of $300,000 USD to earn a 49% assignment of interest for the North American Rights to the highly efficient CLED Street Lighting system. No payment has yet been received as at July 31, 2013, and Balon Bleu Holdings is considered to have defaulted on the agreement.
4. COMMON STOCK
The authorized capital of the Company is 250,000,000 common shares with a par value of $ 0.001 per share.
As at July 31, 2013, we had a total of 74,170,997 shares issued and outstanding.
5. ADVANCE PAYMENT
On November 12, 2012, the Company entered into a Certified Emission Reductions (“CER”) Pre-sale and Purchase Agreement (“CERSPA”) with Bluforest, Inc. (“Bluforest”). Under the agreement, we pre-purchased 66,000 CERs from Bluforest. The total purchase price of $660,000 was paid in the form of 3,000,000 restricted shares of the Company’s common stock. We recorded the purchase of $660,000 as an advance payment on the balance sheets of the Company as of the transaction date.
6. NEW ACCOUNTING PRONOUNCEMENTS
ASU 2011-08,
Intangibles – Goodwill and Other (Topic 350): Testing Goodwill for Impairment
is applicable to fiscal years beginning after December 15, 2011. Early application is permitted. The Company is currently assessing the impact this standard will have on its financial statements.
The Company does not expect the adoption of any other recent accounting pronouncements will have a material impact on its financial statements.
7. ADVANCES PAYABLE
During the six month period ended July 31, 2013 the Company received a further advance of $16,792 from an unrelated third party which amount was used to settle certain outstanding accounts payable, and as deposits to certain vendors for services to be provided subsequent to the current period. A total of $64,383 has been recorded as advance payable on the balance sheets of the Company as of July 31, 2013 ($47,591 as of January 31, 2013), which advance bears no interest and is due on demand.
GLOBAL RESOURCE ENERGY INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
July 31, 2013
8. RELATED PARTY TRANSACTIONS
During the fiscal year ended January 31, 2013 Mr. Robert Alan Baker, the Company’s then sole officer, director and controlling shareholder advanced a total of $11,683 to retire certain Company expenses in the normal course. These amounts are due on demand, bear no interest and are recorded as Accounts Payable, Related party.
On March 1, 2013 the Board of Directors accepted the resignation of Robert Alan Baker as the President/Chief Executive Officer, Secretary, Treasurer and the sole member of the Board of Directors of the Company. Mr. Baker continued to be the Company’s controlling shareholder.
9. INCOME TAXES
The provision for income taxes at July 31, 2013 was comprised of federal alternative minimum tax. Significant components of deferred tax assets include net operating loss carry forwards and stock-based compensation. Due to the uncertainty of their realization, we have not recorded any income tax benefit as we have established valuation allowances for any such benefits.
10. SUBSEQUENT EVENTS
We have evaluated subsequent events through September 18, 2013. Other than those set out above, there have been no subsequent events for which disclosure is required which are not previously disclosed herein.